Post by
TheRock07 on Jun 23, 2011 10:16am
Lignin and Ethanol hedge each other
OIl is down about $5 today, as the IEA advised oil consuming nations to release some of their strategic reserves.
High oil prices are impairing the economic recovery, altho good for ethanol producers.
Lower oil prices will increase the economic rate of recovery while bad for ethanol producers.
Lignol's focus on high purity lignin derivatives was precisely for this reason................to avoid the cylicality associated with energy prices.
High purity lignin products will be used in the general economy which will be more robust under lower oil prices.
This will result in lower ethanol margins, but that will be more than offset by greater demand for HP lignin products in the general economy ( Lignol will generate more sales from lignin than from ethanol ( about 60 % lignin ).
That is, lignin and ethanol are natural hedges against each other.
There is another benefit to lignol, of lower oil prices.
It will force first generation ethanol producers ( corn based ) to migrate faster to lignol's second generation ( non-food based ) ethanol biorefinery model and , with increased royalties to Lignol from patents.
Comment by
birchjunk on Jun 23, 2011 3:46pm
Informative posts indeed.Feedback coming continously over the next month or so , it could be a very interesting summer.An off-take agreement is likley to be multi-party.Also, a couple of more patents very close to approval.The B.C govt is looking at options for those pine beetle forests.Lignol has the solution.